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AICACC Examination

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1 / 20

A low Return on Investment Ratio (ROI) indicates

2 / 20

Every business transaction affects at least ____ accounts

3 / 20

The process of recording in Journal is done

4 / 20

What is variable sampling

5 / 20

Rigg, Steele, and Urco Corps., all accrual-basis, calendar-year C corporations, have only voting
common stock outstanding. Rigg owns 85 percent of Steele and 40 percent of Urco. Steele owns 50
percent of Urco. Which group of corporations qualifies as an affiliated group and may join in the filing
of a consolidated federal income tax return?

6 / 20

Goll Co. has a 25% interest in the common stock of Rose Co. and an 18% interest in the common
stock of Jave Co. Neither investment gives Goll the ability to exercise significant influence over either
company's operating and financial policies. Which of the two investments should Goll account for
using the equity method?

7 / 20

Sussman Co. prepared cash-basis financial statements for the month ended January 31. A summary
of Sussman's January activities follows:
Credit sales of $5,600.
Collections of $1,900 relating to January credit sales.
Accrued salaries of $1,200.
By what amount will Sussman's cash-basis income for the month ended January 31 increase as a result
of restating these activities to the accrual basis of accounting?

8 / 20

The primary purpose of a not-for-profit organization's statement of activities is to provide relevant information to its:

9 / 20

During the year, Verity Co. purchased $200,000 of Otra Co. bonds at par and $50,000 of U.S.
Treasury bills. Verity classified the Otra bonds as available-for-sale securities and the Treasury bills
as cash equivalents. In Verity's statement of cash flows, what amount should it report as net cash
used in investing activities?

10 / 20

Accrual accounting involves accruals and deferrals. Which of the following best describes accruals
and deferrals?

11 / 20

A company sells DVD players for $200 per unit. The players have a unit variable cost of $160. The
company estimates that it will sell one home entertainment system for every four DVD players sold.
Home entertainment systems have a unit variable cost of $460 and sell for $600 per unit. The
company's fixed costs are $90,000. Assuming that the sales mix estimate is correct, how many DVD
players need to be sold for the company to break even?

12 / 20

Which of the following is a major difference between the just-in-time (JIT) and traditional approaches
to manufacturing?

13 / 20

Star Co. is a retail store specializing in contemporary furniture. The following information is taken from
Star's June budget:
Sales $540,000
Cost of goods sold 300,000
Merchandise inventory–June 1 150,000
Merchandise inventory–June 30 180,000
Accounts payable for purchases–June 1 85,000
Accounts payable for purchases–June 30 75,000
What amount should Star budget for cash disbursements for June purchases?

14 / 20

A company that produces a single product using a continuous process had no work in process on
April 1. During the month of April, 10,000 units were started and 9,000 completed units were
transferred. The ending work-in-process inventory was complete as to materials and 50% complete
as to conversion. The cost of direct materials was $114,000, and the cost of direct labor amounted to
$38,000. Manufacturing overhead is assigned at the rate of 50% of direct materials. For the purpose
of determining the cost of goods manufactured in April, what is the cost per equivalent whole unit?

15 / 20

The expected selling price for a new product is $19.00. Management's goal is to obtain a 20%
contribution margin on all sales. If the new product has variable selling and distribution costs of $3.00
per unit, what is the product's target variable manufacturing cost?

16 / 20

A 20% target contribution margin is set for Duct, which is a new product with the following unit costs:
Manufacturing costs

Variable $12
Fixed 8

Selling & admin. Costs

Variable $3
Fixed 5

What is Duct's target selling price?

17 / 20

Which of the following factors most likely would be considered an inherent limitation to an entity's
internal control?

18 / 20

Which of the following procedures would an auditor most likely perform before the balance sheet?

19 / 20

Which of the following is an element of a CPA firm's quality control policies and procedures applicable
to the firm's auditing practice?

20 / 20

Which of the following is an element of a CPA firm's quality control policies and procedures applicable
to the firm's accounting and auditing practice?

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